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Owen Scott The Press, August 2013

Growing up in rural New Zealand I had a friend disposed equally to scientific experimentation and torture of innocent beings. This fellow enjoyed trapping a spider in a jar and then using a magnifying glass to focus the sun’s rays on the poor insect until it burned.

If he had simply left the spider in the jar the result would ultimately have been the same, a deceased arachnid, but focussing the power of the sun rapidly accelerated that process.

In a marketing sense more of our tech companies need to get better at ‘torturing the spider’ i.e. focussing on highly specific target markets to intensify the power of their marketing.

Selecting a market, i.e. a set of customers with a similar level of buying interest, isn’t easy. When you are striving hard to grow and expand, it seems counterintuitive to reject sales opportunities, but the reality is the wider you choose to spread your marketing effort the less effective it will be.

It is one of the hardest marketing decisions you’ll make. But all companies, no matter how large, have limited resources and these resources need to be 100% focused on as specific a market as possible to achieve the maximum gain. Everything becomes aimed at a particular group of customers – the sales process, promotions, the support process, the product. You save time, effort and money and the focus makes things happen.

Take the dreaded business concept of ‘networking’. Turn up at some shindig with a few hundred people and it is very hard to get to know everyone there, and for them to know and like you. If you chose four or five people to get to know, a much stronger relationship would be likely. The more you focus on a group of people the more likely they are to focus on you.

Marketing your product or service is no different.

This commitment to focus is becoming more important as customer choice is broader than ever. They have more information than ever before about those choices, and can access it every easily.

In a world of empowered consumers and profilerating numbers of products, the answer is not to shout louder but to be smarter about your marketing. That is built around a great understanding of a discreet group of customers and focussing all of your efforts on them. Once you have prospered in that niche you can move on to the next.

The focus strategy becomes important when you are exporting. By finding, focussing on and dominating a niche, no matter how small, you are much more likely to get sustainable growth.

Trying to sell one product into five markets is the equivalent of selling five different products. That’s because a ‘product’ from a customer’s point of view is not just what you have produced, but all the things around that, how they learn about it, how they assess and buy it, how they learn to use it and gain value from it and how they continue to remain current with it. From market to market these needs can vary widely.

Two Kiwi tech companies that recently listed on the New Zealand stock exchange are examples of the power of focussing.

Early in their history, SLI Systems, a provider of online search products, sold to a relatively broad range of customer types across multiple geographies. They really started to gain momentum when they chose to concentrate on e-commerce firms in the US. SLI are now dominant players in their niche in the US, and are growing fast in other markets like Australia and the UK.

Wynyard Group also went public recently. They emerged from that factory of innovation, Jade Software, taking some IP and smart people to concentrate on the risk and security market. Although it is early days for Wynyard, they have achieved impressive momentum.

Determining what to focus on requires thinking through some basic strategy questions.

What is the core customer problem your product solves, or to flip it around – what is the main contribution your product makes to the lives (or business) of a typical customer? For a software vendor it might be about helping a certain group of customers make specific types of decisions. What market segments have the highest demand for meeting this need?

How attractive are those segments to your company? How large and potentially profitable are they, where are they, how easy to locate, what level of competitiveness is there etc.

What is your firm’s capability? What sort of resources and skills do you have to maximise the opportunities, where do you have sales staff or channels, where are your best reference customers?

People reject focussing because they are concerned about what they might miss, but simply focussing on something is more important than making the perfect choice. You might not be burning the absolute best spider, but at least you are burning something and getting some momentum, all anybody wants out of their marketing programme.